Amid Facebook’s Price Volatility, What Is the Value of IPG’s Remaining Stake?

Here's one estimate

When Interpublic sold half of its Facebook stake last year, it appeared company chief Michael Roth left some money on the table for an entity with a $100 billion valuation at the opening of its first day of trading on May 18. When IPG sold its shares in the private pre-IPO transaction, Facebook at the time carried a valuation of around $70 billion.

IPG has never said how many shares it owned in Facebook, obtained in June 2006 when the holding company bought into the fledgling social network as a strategic investment. Sources have told AdweekIPG paid less than $5 million for its initial stake of less than half a percent. When the company sold half of that holding last year, it said it netted $133 million in cash for a pre-tax gain of $132 million.

But given the downward volatility in Facebook’s shares since the IPO, Interpublic’s remaining stock may well be worth close to what the holding company received last year. According to Brian Wieser, senior research analyst at Pivotal Research Group, Facebook’s stock was probably valued in the high $20s when IPG sold privately versus the $30-range where it is trading now. He estimates the remainder of Interpublic’s holding would be currently valued between $150 million and $200 million.

Wieser has emerged as a voice of caution during the hype surrounding Facebook’s IPO as his company assigned a "sell" recommendation on the stock. He questions Facebook's IPO valuation and its opening share price of $38, given concerns about expected revenue growth levels at the social revenue network. Wieser not only brings his experience as a former associate financial analyst at Deutsche Bank to that judgment, but he also used to work in the ad business at IPG Mediabrands’ MagnaGlobal where he was evp, global director of forecasting.

An IPG rep declined to comment on the company’s remaining Facebook holding.